Lecture 6 - Brand Growth

Question 1

What are the 2 main ways to grow a brand?

Answer 1

Mental Availability - create a compelling expiation & brand salience that increase the likelihood of your brand to be taken into consideration during the decision making process
Physical Availability - match consumer expectations of where the brand is available to buy & influence how they purchase

Question 2

What are the key factors within short term brand building?

Answer 2

Sales Activation
- generate new sales
- persuasive messages
- product focus
- exploit brand equity
- targeted marketing

Question 3

What are the key factors within long term brand building?

Answer 3

• influence future sales
• emotional priming
• brand focus
• create brand equity
• mass marketing

Question 4

What are the key stages within the brand lifecycle (Lehu, 2008)?

Answer 4

Birth > Growth > Maturity > Decline > Death

Question 5

What are different causes of brand decline/ challenges?

Answer 5

• quality aspect
• changing consumer trends
• impact of technology (advances)
• growing number of private labels/ retailer own labels
• brands becoming generic
• lack of effective & consistent communication
• keeping the brand young & relevant

Question 6

How do firms grow (Ansoff matrix)?

Answer 6

• market penetration
• market development
• product development
• diversification

Question 7

market penetration

Answer 7

focus on current products/ markers

Question 8

market development

Answer 8

entering new market with existing product

Question 9

product development

Answer 9

entering existing market with new product

Question 10

diversification

Answer 10

entering new market with new product

Question 11

What are the key 4 options for brand growth?

Answer 11

• licensing
• brand extensions
• brand rejuvenation
• brand alliances

Question 12

What is brand licensing?

Answer 12

The brand owner (the licensor) grants another firm (the licensee) the right to use the brand.
- this helps generate additional renew & protects the brand from miappropriation
- extend the brand without cost of direct entry
- potential for brand dilution & 2 sided moral hazard

Question 13

What are brand extensions?

Answer 13

Brand extensions involve the application of an established brand name to new products in order to capitalise on the equity of the original brand name & capture new market segments (Karin et al, 1996)

Question 14

Reasons for brand extension

Answer 14

• brands posses competitive advantage
• dominant form in new product introduction
• used as a strategic device
• helps extend market share quickly as parent brand is already established & trusted
• assists in increasing customer acceptance to enhance the prospect of new product introductions success

Question 15

Horizontal (category) Brand Extension

Answer 15

same product new market category

Question 16

Vertical (line) Brand Extension

Answer 16

same product same category

Question 17

the risk of brand stretching

Answer 17

brands who stretch too far risk diluting the core associations and eroding the consumer base (Farquhar et al, 2013)

Question 18

The importance of fit

Answer 18

consumers are more likely to experiment/ purchase a new product if their is a certain degree of compatibility between the brand and the new category (Lahiti & Gupta, 2005)
- perceived fit is heavily discussed within literature & emphasises that consumer attitude towards the brand an category has an influence over behaviours including: intentions, choices and purchases.

Question 19

Why is there growth of Brand Alliances?

Answer 19

Brands are valuable assets & can be combined to form an alliance where has a greater impact that what the brands had operating independently

Question 20

What is a brand alliance?

Answer 20

defined as a long or short term combination of 2 or more partner brands that undertake combined corporate activities (Schnittka et al., 2017)

Question 21

What are the 3 types of brand alliances?

Answer 21

• co-branding
• brand licenses
• cross marketing

Question 22

Co Branding

Answer 22

partner brands offer a jointly branded product, the most widely used form

Question 23

Brand Licences

Answer 23

a contractual agreement where a brand lets another organisation use its brand on products

Question 24

Cross Marketing

Answer 24

an agreement for mutual promotion between 2 companies

Question 25

Motivations for engaging in brand alliances

Answer 25

• easier for a brand to enter a unfamiliar international market through cooperation with a well established local brand
• sharing research and development costs, lowering the financial risks associated with a new product launch
• reduce high failure rate of new products due to existing customer perceptions of the established partner brand
• low equity brands benefit from association with high equity brands

Question 26

choosing the right brand ally

Answer 26

• existing brand equity
• levels of brand familiarity
• consumer brand association/ perceived quality
• understanding the ally’s brand personality
• extent to which the parter brand ‘fits’ with the brand ally

Question 27

Importance of choosing the right brand ally

Answer 27

• choosing the wrong secondary brand as a partner may cause negative spillover effects

Question 28

disadvantages of brand ally

Answer 28

• the partner brand may gain more than the other
• if an ally goes ‘rogue’ it can have an impact on the partnership bond/ guilt through association
• repetitional risk
• financial risk

Question 29

Brand Acquisition

Answer 29

Refers to the process where a company purchases or acquires the right to another companies brand

Question 30

What are key example of brand acquisition?

Answer 30

• Mini & Bmw
• Mars & Hotel Chocolat

Question 31

Why do companies engage in acquisitions?

Answer 31

• market expansion & growth
• reduce competition
• portfolio diversification
• competitive advantage
• talent acquisition
• exit strategy